Estate Planning and Farmland

Most land owners are aware of Agricultural Property Relief (APR) and could be forgiven for thinking that this means there is no risk of their Estate paying Inheritance Tax.

Unfortunately there are situations where farmland does not qualify for 100% APR. There have been cases where the HM Revenue & Customs have successfully challenged claims for APR and the rules are complicated.

Family farms often have the ownership spread across the family and in some cases are owned by the family company. Where land is occupied by one person but farmed by another entity, such as a company, it is easy to end up with only 50% APR. There can also be problems if the farmer leaves a spouse who lives in the house but is not part of the farming business.

It is very important to make sure that property ownership is structured correctly to minimise tax liabilities.